It was wondered, in the aftermath of the Cadbury Report, where the abundance of talented and conscientious non-executive directors that the system relied upon might come from, and this was still a subject of concern ten years later.
The Higgs Report, commissioned by the UK Government to review the roles of independent directors and of audit committees, has a slightly different flavour from those preceding it, and while it too rejects "the brittleness and rigidity of legislation" it is certainly more prescriptive and firm in its recommendations, aiming to reinforce the stipulations of the Combined Code.
Specifically the Report proposes that:
- at least half of a board (excluding the Chair) be comprised of non-executive directors;
- that those non-executives should meet at least once a year in isolation to discuss company performance (a move away from the clear preference for unitary board structures displayed elsewhere);
- that a senior independent director be nominated and made available for shareholders to express any concerns to; and
- that potential non-executive directors should satisfy themselves that they possess the knowledge, experience, skills and time to carry out their duties with due diligence.
Elements of these recommendations were duly compiled by the Financial Reporting Council and released as Good Practice Suggestions from the Higgs Report (pdf) in June 2006, but the bulk of the suggestions have not as yet been formally incorporated into the Combined Code (though the suggested proportion of non-executive directors on the board was raised from "not less than a third" to half in the 2003 version). A CBI poll conducted in response to the Reports found that 82% of FTSE 100 Chairmen thought that the role of Senior Independent Director would undermine their own.
Ilgili Dosyalar
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